Yesterday the former Dalmore “Director of Rare Whisky” David Robertson presented a new private equity fund called Platinum Whisky Investment Fund to be launched in Hong Kong. The fund is based on the Cayman Islands and it is intended to collect $10 million from investors to buy rare whisky.
I don’t know if this is a coincience or not, but almost exactly one year ago Mr. Robertson had made public his Whisky Trading Company which runs as a UK Enterprise Investment Scheme. This company aimed to invest £2.5 to £4.5 million in whisky, according to the original press release from 2013.
This press release also stated:
“With a huge market already well-established in fine wine investment, whisky as an alternative investment market is dynamically growing both at home and abroad. Whisky auction houses in the UK alone saw 14,000 bottles sold in 2012, a huge jump from just 2,000 in 2008. By 2020, this number is estimated to grow by 114 percent to 30,000 bottles. Globally 2012 saw around 75,000 bottles auctioned valued at £11 million, and this is expected to double in volume to 150,000 bottles in 2020 with values trebling to £33 million, suggesting the trend towards premiumisation will continue.”
The combined investment goals of David Robertson’s two ventures are comparable to the entire 2012 whisky auction market and they are already in the region of a third of the projected whisky auction market for 2020. Both schemes promise an annual return of 15% or more. If this is successful, we can assume that the current investment bubble will continue to be inflated for a few more years.
But how this is supposed to work in the long run without destroying the market as a whole has yet to be explained by Mr Robinson. Does he intend to buy each and every bottle currently sold at whisky auctions? And who does he want to sell the bottles to?
Any investors with a serious interest in this should ask Mr. Robertson these questions. And they should be aware that they will be buying whisky at a time when it is as expensive as never before. The situation is comparable with stock market gurus saying “The S&P 500 has been marking all-time high after all-time high for weeks. Now is the time to invest your money in the stock market!” Or is it actually time for a consolidation? Think about it.